Employees will be given more power to deal with problems they have with their employer under the Employment Bill, introduced in Parliament yesterday.
The current employment tribunal system is an arduous process with a huge backlog of complaints putting many people off bringing cases against their employer.
In many instances an external ombudsman will be appointed to revolve internal issues, but under the proposed legislation employees will be encouraged to raise grievances with employers before applying to a tribunal giving the employer an opportunity to resolve the issue.
"Many disagreements can be successfully resolved through better communication procedures between and individual and an employer," said secretary for state for trade and industry Patricia Hewitt. "Our changes will encourage better dialogue between employees and employers."
A fixed period of conciliation will also be enforced to prevent settlement dragging on for unnecessarily long periods, which also deters individuals from bringing claims.
The Employment Tribunal Taskforce was set up at the end of October. Its duty is to create a more cost-effective service by making recommendations to the DTI on how services can be made more efficient.
Its report is expected by the spring of next year in time for the proposals to be included in the newly drafted Employment Act expected in mid 2003.
The DTI said the government had dropped plans to introduce and charge for bringing a claim to tribunals because it would 'make it extremely difficult for people with low incomes to use the system' against employers.
A second area of reform is maternity pay. The changes promise great improvements to parents who will be entitled to paid paternity, two weeks leave for working fathers and six months, as opposed to three at present, paid maternity leave for mothers.
"Something needs to be done to improve the current situation, life for working mothers, especially single mothers, is difficult enough," said a spokeswoman at the Maternity Association.
The Department of Trade and Industry said the proposals were in line with the government's manifesto to 'help parents devote more time to their children early in life'.
It estimates that around 800,000 parents per year will benefit once the scheme is implemented in 2003.